Home Buyer Incentives and Programs

Exploring Canada's Top Real Estate Incentives and Programs for Home Buyers and Investors in 2024

Canada’s real estate market in 2024 presents a wealth of opportunities for investors, with various federal and provincial programs designed to stimulate growth and development. Whether you’re a first-time buyer or a seasoned developer, these incentives could help you save money and maximize your returns. Below, we break down the key programs available for real estate investors and first-time buyers, including the latest changes and real estate investment programs to watch out for.

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First-Time Home Buyer Programs

For first-time home buyers, several federal initiatives can help lower the costs associated with purchasing a home or down payment property. These programs are particularly useful if you’re planning to start your real estate journey by acquiring your first rental property.

First Home Savings Account (FHSA)

  • The FHSA allows eligible Canadians to save up to $40,000 toward their first home purchase, with an annual contribution limit of $8,000.
  • Contributions to the FHSA are tax-deductible, much like an RRSP, and withdrawals are tax-free when used to buy your first home. Unused portions of your contribution room can be carried forward, making it a flexible and powerful savings tool for first-time buyers.
  • Pro Tip: Combining the FHSA with the Home Buyers‘ Plan (HBP) can significantly boost your purchasing power, allowing you to draw on multiple tax-advantaged accounts to fund your down payment.

Home Buyers' Plan (HBP)

  • The HBP permits first-time buyers to withdraw up to $60,000 (increased from $35,000 for withdrawals after April 16, 2024) from their Registered Retirement Savings Plan (RRSP) to put toward a home purchase.
  • The amount must be repaid over a 15-year period, beginning 5 years after the first withdrawal. If you fail to repay, the amount is included as taxable income for that year.
  • Investor Tip: While the HBP is usually aimed at personal home purchases, it can be useful for investors who plan to live in the property for a period before converting it to a rental unit.

First-Time Home Buyers' Tax Credit (HBTC)

  • First-time home buyers are eligible for a non-refundable tax credit of up to $1,500 to help offset the closing costs of their home purchase, including legal fees, inspections, and transfer taxes.
  • Bonus Tip: If you’re buying a property with a partner who is also a first-time home buyer, you can both apply for the tax credit, doubling the benefit.

GST/HST New Housing Rebate

  • This rebate allows buyers to recoup some of the GST or HST paid on the purchase of a new or substantially renovated home.
  • The amount you can claim depends on the value of the property. For homes priced up to $350,000, you may be eligible for a full rebate of the GST/HST paid. For homes between $350,000 and $450,000, the rebate is gradually reduced.
  • Investor Insight: If you’re buying new construction properties as part of a long-term rental strategy, this rebate can save you thousands of dollars upfront.

Land Transfer Tax Rebates

  • In provinces like Ontario, first-time buyers can receive up to $4,000 as a rebate on land transfer taxes. Similar programs exist in other provinces, such as British Columbia and Prince Edward Island.
  • Investor Bonus: While land transfer tax rebates are typically for primary residences, you could strategically apply these savings if you’re house-hacking (i.e., living in part of the home while renting out the other parts).

Development Incentives

There are also multiple programs and incentives that are advantageous to developers looking to build in Calgary. Here are some of the top opportunities for developers.

Downtown Calgary Development Incentive Program

  • Eligible developers can receive up to $75 per square foot for converting vacant office spaces in downtown Calgary into residential units, hotels, co-living spaces, or cultural venues, with a cap of $15 million per property.
  • The program specifically targets the revitalization of Calgary’s downtown core, which has seen high vacancy rates in office buildings. It also addresses the growing demand for residential housing in the area.
  • Investor Insight: If you’re thinking of getting involved in redevelopment projects, this program could significantly reduce your renovation costs and give you a prime location in a revitalizing market.

Housing Accelerator Fund: Federal Support for Affordable Housing

To further support housing affordability, the Housing Accelerator Fund, managed by the Canada Mortgage and Housing Corporation (CMHC), offers municipalities financial assistance to expedite the development of affordable real estate.

  • The fund targets cities across Canada that are implementing innovative housing solutions. By partnering with local municipalities, CMHC provides funding for infrastructure, planning, and other aspects necessary to accelerate project timelines.
  • Developer Tip: Investors focused on affordable housing developments may find this fund a great complementary resource to local incentives, as it adds federal financial backing to projects aimed at meeting local housing needs.

Investor Incentives and Programs for Purchasing Real Estate in Calgary

Next we will cover the top programs and incentives for purchasing real estate in Calgary for investors! These programs make it easier to realize a return on investment regardless of your investing style.

Secondary Suite Incentive Program

In Calgary, investors can take advantage of the Secondary Suite Incentive Program, which encourages homeowners to build secondary rental units within their property (such as basement suites or garden suites).

  • The program offers up to $10,000 to help cover the costs of building a secondary suite. Additional financial bonuses are available for projects that include energy efficiency upgrades or accessibility improvements.
  • Investor Strategy: Secondary suites are an excellent way to increase rental income without purchasing an entirely new property. With financial support from the city, the program lowers the cost of entry into real estate investment.

MLI Select Program: Mortgage Loan Insurance for Multi-Unit Residential Properties

One of the most powerful programs for real estate investors in 2024 is the MLI Select Program from CMHC, designed to incentivize the construction or acquisition of multi-unit residential property, including affordable housing, student accommodations, and registered retirement savings plan retirement homes:

  • Key Features: This program offers reduced insurance premiums, extended amortization periods of up to 55 years, and higher loan-to-value ratios for projects that meet certain criteria.
  • Scoring System: The program operates on a points-based system. Points are awarded for meeting affordability, energy efficiency, and accessibility targets. Higher points lead to better loan terms, including reduced personal financial risk (limited recourse options).
Investor Tip: The program’s emphasis on energy efficiency and affordability means that sustainable building practices and offering affordable units are essential to maximizing the benefits of investment.

Recent changes to the program: CMHC has capped the points awarded for energy efficiency at 50, which means that to unlock the highest benefits, projects must now include affordability elements. This change reflects a push toward making housing both green and accessible for lower-income residents, specifically through mortgage.

For full details on the MLI Select Program click here: MLI Select Calgary

Essential Tools and Resources for First-Time Home Buyers and Investors

Navigating the homebuying process can be overwhelming, especially for first-time buyers. Fortunately, there are numerous tools and resources available to help simplify this journey. From financial calculators that assess affordability to government programs designed to make homeownership more accessible, prospective buyers can find valuable support at every step. This section provides a curated list of credible websites offering essential tools, educational resources, and information on various programs to empower you in your homebuying experience.

Financial Calculators

Government Programs

Online Resources

Credit and Insurance Tools

Real Estate Listing Platforms

CMHC Educational Resources

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